Silicon Valley: Your Tax Dollars at Work

From fast computers to new cures to space tourism, a timeline of government-assisted innovation.

1941

During the Second World War, Congress sinks nearly $5 billion (in 2013 dollars) into radar development. The staff of Bell Labs, a major recipient, nearly doubles to 9,000.

1945

University of Pennsylvania researchers contracted by the Army build the first general-purpose electronic computer. It is 1,440 times faster than a calculator, weighs 30 tons, and fills a 30-by-50-foot room.

1951

The military commissions a nationwide computer network to help detect and shoot down enemy aircraft. It is the first system to use cathode ray tube screens, magnetic-core RAM, and an early touch screen.

 

1953

The Pentagon funds Sylvania's Electronic Defense Lab to develop microwave and satellite communications technologies.

1955

The Atomic Energy Commission hires Remington Rand to build the first supercomputer for the Lawrence Livermore National Laboratory; IBM is later hired to build one for the National Security Agency and another for what is now Los Alamos National Laboratory.

1958

The Pentagon establishes the Advanced Research Projects Agency, or ARPA (now DARPA).

1963

Bankrolled by ARPA, the nonprofit Stanford Research Institute develops bit-mapped screens, the first mouse, hypertext, and early iterations of a graphical user interface.

1969

The Pentagon creates a decentralized computer network to safeguard American data from Soviet attack. The result is ARPANET, the foundation for the internet.

1971

With the help of numerous ARPA-trained researchers, Palo Alto research lab Xerox PARC goes on to develop a modern graphical user interface, the laser printer, and networking technology.

1973

Military researchers invent GPS, the basis for smartphone navigation and location-based services.

1976

Apple is founded in a Cupertino garage; two years later, a federally backed fund invests $500,000 in the startup.

1984

The first Macintosh debuts—Apple sells 50,000 units in three months.

An old computer
1989

Tim Berners-Lee, a researcher at the European government physics collaborative known as CERN, proposes HTML, the code web browsers use to render pages.

1990

The DOE launches the Human Genome Project, a $3.6 billion undertaking, to sequence the genome. It spawns a biotech revolution and numerous companies. Estimated economic impact: $796 billion.

1991

University of Minnesota researchers create Gopher, the protocol used to navigate the internet before web browsers became popular.

May
1992

The Supreme Court rules that a state may only collect sales tax if the seller has a physical connection to that state—a huge subsidy for web-only retailers.

Jun.
1992

A University of Illinois-Chicago lab unveils the first virtual-reality environment.

1993

Marc Andreessen, an undergrad working at the National Center for Supercomputing Applications, unveils Mosaic, the most advanced web browser to date, before leaving to launch Netscape. Internet Explorer, Firefox, and Chrome rely on key Mosaic design features to this day.

 

Apr.
1998

Stanford grad students Sergey Brin and Larry Page publish a paper describing their Google prototype—developed with funding from the National Science Foundation, DARPA, and NASA.

Larry Page and Sergey Brin portrait
Larry Page and Sergey Brin.
May
1998

Bill Gates on PCs: "There isn't an industry in America that is more creative, more alive, and more competitive. And the amazing thing is that all this happened without any government involvement."

Jun.
1998

The Census Bureau hands database management firm Oracle a five-year, $20 million contract.

2001

The first iPod is released.

An old iPod
2004

Microsoft secures $305 million worth of tax breaks, credits, and exemptions from Washington state.

Aug.
2004

Nanosolar, the inventor of cheap, efficient, thin-film solar cells, wins a $10 million DARPA contract.

Jan.
2007

Lenoir, North Carolina, woos a Google data center with tax breaks worth $212 million over 30 years—more than $1 million for each job Google hopes to create.

Jan.
2007

The iPhone debuts.

Aug.
2007

ARPA-e is created to advance "high-potential, high-impact energy technologies that are too early for private sector investment."

Sep.
2009

The solar-panel maker Solyndra gets a $535 million DOE loan. The company goes bankrupt two years later after plummeting prices on conventional panels undermine its business model.

Solyndra building

 

Jan.
2010

Tesla Motors receives its preapproved $465 million DOE loan. It pays it back in three years.

Apr.
2011

Facebook opens its first data center in Prineville, Oregon, and gets a $42 million income, property, and excise tax holiday.

Apr.
2011

When tech companies threaten to flee the city, San Francisco enacts a "Twitter tax break" worth more than $20 million.

May
2011

Motorola Mobility (shortly before becoming a Google subsidiary) agrees to remain in Illinois in exchange for state tax breaks valued at more than $100 million.

Jun.
2011

At a meeting of the Cupertino City Council, Steve Jobs is asked whether Apple would provide the city with free wifi. Jobs responds: "If we can get out of paying taxes, I'll be glad to put up wifi."

Aug.
2012

After Apple announces a new $1 billion data center in Reno, Nevada slashes its tax burden by $89 million over 10 years, the largest such break in state history.

Jul.
2013

Google curries political favor by hosting a DC fundraiser for climate-change-denying GOP Sen. Jim Inhofe of Oklahoma (where the company runs a wind-powered data center). Environmentalists flip out.

2013

San Francisco is projected to spend at least $22 million hosting the America's Cup at the behest of Oracle's Larry Ellison, whose insistence on racing temperamental $8 million boats helps drive 10 of 14 competitors out of the race before it even begins. Despite being docked for cheating, Oracle comes back to beat New Zealand in the finals, retaining its title along with hosting rights for the next series of races.

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